Accounting Assignment

1. (TCO 11) Assume you have just taken a position as controller for a new company that manufactures and sells wrought iron wall hangings. Although the founder of the company, who is the president and CEO, is a great artisan, she has very limited knowledge of accounting.



Instructions

To help your new boss better understand accounting for a manufacturing organization, prepare a response to her in which you: (1) identify, (2) describe, and (3) provide specific examples of the three manufacturing costs used in accounting for a manufacturing company. (4) Explain how manufacturing costs differ from period costs and providing examples of period costs.



2. (TCO 4) Are short-term creditors, long-term creditors, and stockholders primarily interested in the same characteristics and ratios of a company? Explain why or why not.  Provide examples of specific ratios that each party is most interest in.  What do the ratio results indicate? (Points : 20)



3. (TCO 4) The Caltor Company gathered the following condensed data for the year ended December 31, 2010:



Net sales 1,279,000

Administrative expenses 239,000

Depreciation expense 68,000

Dividends paid to common stockholders 38,000

Selling expenses 45,000

Supplies 20,000

Buildings 100,000

Cash 150,000

Common Stock 500,000

Preferred stock dividends 21,000

Average common shares outstanding 200,000







Instructions:

1.	Prepare an income statement for the year ended December 31, 2010.

2.	Compute the earnings per share ratio.  To qualify for full credit, you must state the formula you are using, show your computations and explain your findings



4. (TCO 5) Quiltworks Company reported actual sales of $2,000,000, and fixed costs of $450,000. The contribution margin ratio is 30%. The selling price per unit is $15.



Instructions

(a) Compute the break-even point in dollars and break-even point in units

(b) Compute the margin of safety in dollars and the margin of safety ratio (Points : 30)